For Personal Care brands in China, online competence is no longer a differentiator but table stakes, as noted in L2’s new Digital IQ Index for Personal Care brands in China. In five years, the share of Beauty & Personal Care products sold online in China has increased nearly six-fold, and 15% of the industry’s sales are now generated online. This is three times the penetration observed in other major markets.

personal-care-china-2015-e-commerce-share-value-and-retail-sales-by-product-categoryWhile multinationals still best Chinese brands in average Digital IQ, Chinese brands demonstrate an advantage across several forward-leaning metrics. Three of the five “most improved” brands in the 2015 Index are local players (Breeze, Darlie, and Bawang). Meanwhile multinationals, which are prominent on brick-and-mortar shelves, have been “caught off-guard” by China’s rapid shift to e-commerce. As reported this week, Nestlé, Colgate-Palmolive and Unilever (which has just opened a store on JD Worldwide) have been particularly affected by the e-commerce explosion, as well as Walmart.

Screen Shot 2015-06-15 at 6.38.28 PMOn Tmall, the biggest B2C e-commerce platform in China, 95% of Personal Care brands now host brand shops, with 14% opening shops within the last 18 months. L2 research finds that local brands consistently outperform on key Tmall metrics including product availability, search visibility, user reviews, pricing and monthly sales. For example, domestic tissue brand Breeze —which L2 ranks as digitally Gifted — has incentivized Tmall followers to write product reviews by offering cash-back rewards and a chance to win an Apple Watch. Local sanitary protection brand ABC, also Gifted, supports a customer loyalty program on Tmall via a QR code to scan for access to a virtual member card.

China became the globe’s biggest e-commerce market two years ago, and today an estimated one-third of the country’s population shops online.

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